PRODUCT LIFE CYCLE

The Product Life Cycle (PLC) is used to map the lifespan of a product. It is the period of time over which an item is developed, brought to market and eventually removed from the market. There are generally four stages in the life of a product. These four stages are the Introduction stage, the Growth stage, the Maturity stage and the Decline stage. There is no set time period for the PLC and the length of each stage may vary. One product's entire life cycle could be over in a few months. Another product could last for years. Also, the introduction stage may last much longer than the growth stage and vice versa. The four stages in a Product Life Cycle –

·         Introduction: Product is introduced in the market with intention to build a clear identity and heavy promotion is done for maximum awareness. Before actual offering of the product to customers, product passes through product development, involves prototype and market tests. Companies incur more costs in this phase and also bear additional cost for distribution. On the other hand, there are a few customers at this stage, means low sales volume. So, during introductory stage company’s profits shows a negative figure because of huge cost but low sales volume.

·         Growth: In this stage, company’s sales and profits starts increasing and competition also begin to increase. The product becomes well recognized at this stage and some of the buyers repeat the purchase patterns. During this stage, firms focus on brand preference and gaining market share. 

·         Maturity: At maturity stage, brand awareness is strong so sale continues to grow but at a declining rate as compared to past. At this stage, there are more competitors with the same products. So, companies defend their market share.  At this stage usually loyal customers make purchases.

·         Decline: Decline in sales, change in trends and unfavourable economic conditions explain decline stage. At this stage market becomes saturated so sales declines. It may also be due technical obsolescence or customer taste has been changed.

Frooti currently is experiencing the maturity stage in its product life cycle.

Frooti was launched in 1985. The next few years post 85 would define the growth stage. Distribution at this stage was selective and scattered.  Promotion was done with intention to build brand awareness.

Post 90’s define the growth stage for Frooti. Distribution became more significant with the increase demand and acceptability of product. More channels were added for intensive distribution in order to meet increasing demand. Along with maintaining the existing quality, new features and improvements in product were done. A different style of packaging came to be used. Frooti was also available in different packages in contrast to the traditional tetra pack.

The late 90’s and early 2000’s is when the maturity stage for Frooti began. It continues to exist till this date. Frooti added features and modify the product in order to compete in market and differentiate the product from competition. It revamped its packaging and came to be available in Pet Bottles as well. Today Frooti is available in 110ml, 200ml and 1ltr Tetra Paks and 250ml, 600ml, 1.2ltr and 2ltr PET bottles. New channels are being added to face intense competition and incentives are offered to retailers to get shelf preference over competitors. Shah Rukh Khan a very popular celebrity among the masses has been made band ambassador to promote the product and retain brand loyalty.

COMPETITIVE ANALYSIS

Competition can be defined as “The rivalry among sellers trying to achieve such goals as increasing profits, market share, and sales volume by varying the elements of the marketing mix: price, product, distribution, and promotion. It is the product of vying for customers by the pursuit of differential advantage, i.e., changing to better meet consumer wants and needs. In economic theory, various competitive states such as monopolistic competition, oligopoly, perfect competition, and monopoly are delineated based on the degree of control that sellers have over price.”
                                                           -  American Marketing Association

Direct Competition is a market situation where two or more firms offer essentially the same good or service.
A Direct Competitor is a  term that describes a company that produces a virtually identical good or service that is offered for sale within the same market as those produced by another company.

Indirect Competition can be defined as competition among the suppliers of different types of products that satisfy the same needs.
Indirect competitors are suppliers who have provide different products in the same market to serve the same set of needs.

Competition in the case of Frooti

When analysing the competitive market for Frooti we can come up with 3 layers of competitors. The innermost layer consisting of Maaza, Slice and Jumpin signifies direct competition. These products are the closest substitutes for Frooti and are very similar in terms of taste and price. 

The intermediate layer represents a mild level of indirect competition as compared to the next layer. Tropicana and Real Fruit Juice cannot be classified as direct competitors because they have positioned themselves differently in the market and there is a considerable difference in the taste of these products. Also these products are available in different quantities and priced higher than Frooti.

The outermost layer consisiting of Aerated drinks, Appy Fizz, Grappo Fizz and Mineral Water etc signify indirect competition. These products cannot be classified as substitutes for Frooti and the only competition among them is to satisfy the generic need of thirst.

CUSTOMER PERCEIVED VALUE

Customer Perceived Value is also known as Customer Value It can be defined as “The difference between the prospective customer's evaluation of all the benefits and all the costs of an offering and the perceived alternatives."
                   -  Philip Kotler

Customer Perceived value is classified into Total Customer Benefit and Total Customer Cost.

Total Customer Benefit is defined as the perceived monetary value of the bundle of economic, functional and psychological benefits customer expect from a market offering because of the product, service, people and image.

Total Customer Cost is the perceived bundle of costs customers expect to incur in evaluating, obtaining, using and disposing of the given market offering, including monetary, time, energy and psychological costs.

                                              

Total customer benefit is a summation of :

·     

            Product Benefit- Product benefit relates to  the advantages a customer may derive on consumption of the product. These arise out of the generic product qualities. 
In the case of Frooti is a non aerated fruit drink perceived to be healthier than the soft drinks consumed to refresh one self and satisfy the basic need of thirst.

·         Services Benefit: Services offered with the product is the service benefit for that product.
For Frooti the contact details of the company, the expiry date, manufacturing date, ingredients used etc could represent the service benefit.

·         Personnel Benefit: It includes the customer's perception of the utility value of the personnel in the system of the product to him/her. Better, knowledgeable and well trained personnel assisting a customer would be great.
For Frooti there is no direct personnel benefit as such.  The product is available on the shelves of kirana outlets and retail stores. A good distribution channel ensuring easy availability of the product would probably be the personnel benefit.

·         Image Benefit : The reputation of the brand in the market plays a crucial role in decision making. What the customer thinks of the product and what others think of him consuming the product is very vital.
Frooti has always been associated to youth. It comes across as a trendy and cool drink. The ‘ Fresh n Juicy ‘ positioning did wonders for the product.

Similarly Total Customer Cost is the summation of the monetary cost, time cost, energy cost, psychological cost of the product.

• Monetary Cost- This includes all kind of the cost paid by the customer to obtain the product. It includes the price of the product, travelling expenses paid by the customer etc.
• Time Cost-  Total amount of time invested by customer during the buying process. It also would include the time for which the customer can be influenced by the other product. Time can be in seconds, minutes or hours.
• Energy Cost- Total energy spent by the customer in the buying process. It is not clear that for what purpose the term "Energy" is used.
• Psychological Cost- It is the mental effort made during buying, using and maintaining the product.

CONSUMER BEHAVIOUR AND BUYING DECISION PROCESS

Consumer Behaviour is a branch which deals with the various stages a consumer goes through before purchasing products or services. It is the study of how individuals, groups and organizations select, buy, use and dispose of goods, services, ideas or experiences to satisfy their needs and wants. Consumer buying behaviour is influenced by a host of factors:

v  Cultural Factors

§  Subculture

§  Social Classes

v  Social Factors

§  Reference groups

§  Family

v  Personal Factors

§  Age and stage in life cycle

§  Occupation and economic circumstances

§  Personality and self concept

§  Lifestyle and values

Based on such factors that have been listed above and my mental conditioning if I was a consumer was to buy Frooti the following thoughts would cross my mind before I made my purchase decision.

                         

    BUYING DECISION PROCESS

There are 5 stages in a consumer buying decision process.

1. Problem Recognition (awareness of need)
2. Information Search
3. Evaluation of Alternatives
 4. Purchase Decision
 5. Post-Purchase Evaluation

Let us analyse the buying behaviour with reference to Frooti

Problem Recognition: In this stage, a consumer realizes or recognizes that their desired state is different from their actual condition. This could be a simple as “I’m hungry, I need food.”
In my example lets assume we come across a consumer who is thirsty and wants drink that would refresh him.

Information Search: In this stage, a consumer rcognizes their need (or want) and sets forth to find a solution. If it is clothing they need to solve their problem, the look for clothing, if it is food, they look for food.
Carrying on the example set above the consumer would look for products that would help satisfy his problem. He shall come across an array of soft drinks, natural juices, mineral water and non aerated flavoured drinks like Frooti and Maaza. He sets his mind on non aerated flavoured drinks.

Evaluation of Alternatives: In this stage, a consumer has a good idea of what they want, now they are looking at the options that exists. They are evaluating the features of products and brands.
Carrying on with the example now the consumer knows what he wants. He will choose among Frooti, Maaza, Slice and Jumpin as these are the products that would satisfy his problem and they belong to the exact product family that he is looking for.

Purchase Decision: In this stage, a consumer is processing the information from the information search and deciding on the products, store, payment options. More importantly, they are making the decision to move forward with the purchase or not.
Taking the example forward the consumer in this stage would pick a product among the ones mentioned above. His decision would be made after considering a host of factors like affordability, goodwill, taste, quality etc.

Post-Purchase Evaluation: In this stage, the consumer determines if they are satisfied or dissatisfied with the purchasing outcome. Here is where cognitive dissonance occurs, “Did I make the right decision.”
According to the example the consumer has purchased Frooti. He will evaluate the purchase based on the difference between expected outcome and actual outcome. If Frooti managed to really satisfy what he actually wanted then the consumer might turn into a loyalist and stick with the brand for a sustained period of time.

The Buying Decision Model:

FROOTI

 Frooti, or Mango Frooti, as it is popularly called, is one of the largest-selling mango drinks in India. It is the flagship product of and the most successful drink offered by Parle Agro India Pvt. Ltd. in India and Parle Agro Nepal Pvt. Ltd. in Nepal. Frooti was launched in 1985 in TetraPak packages.  Frooti brought Tetra Pak into India. It is also now available in PET bottles and rectangular shaped packs. Frooti is exported to the United States, Canada, the United Kingdom, the United Arab Emirates, Saudi Arabia, Malaysia, Maldives, Singapore, Thailand, New Zealand, Australia, Mozambique, Ghana, Malawi, Zambia, Nigeria, Tanzania, Japan, Ireland, etc. Frooti is currently endorsed by Shah Rukh Khan, in India.

Frooti still holds a dominant position in the Rs300 crore tetrapak fruit juice (TFJ) market. 
Frooti over these years have carved out a niche for itself in the market. Frooti instantly caught the fancy of Indian consumer with its tetrapak and some smart campaigns. Initially the drink was positioned as a kids drink. The product was perceived as a healthy fruit drink by the mothers . So within a short span of time ,the brand was an alternative to the “unhealthy” colas.

 Parle Agro partnered with DaCunha Communications to give birth to Frooti. The launch budget for Frooti was approximately Rs 20 lakh and most of it was spent on TV communication.